Can the Natural Gas Industry and Environmentalists Play Together?

Natural gas is the pivot point around which the energy debate revolves today: Cheap gas means renewables struggle, but no gas means more coal.

Robert F. Kennedy, Jr., Al Gore and other big thinkers say cleaner burning natural gas is a bridge from the harms of coal to mid-century, when the cost and scale of renewables will be adequate to meet demand.

New, more accurate hydrofracturing (fracking) drilling techniques have opened up enormous, previously inaccessible shale deposits, providing abundant, irresistibly low-cost supplies. T. Boone Pickens insisted during a panel on energy security at The Milken Institute Global Conference: Shaping the Future that there is “twice as much oil as the Saudis have” in U.S. shale deposits. Even the accepted estimate of 2,000 trillion cubic feet of shale gas reserves (only half of Pickens’ own estimate) means, he said, “more than 300 billion barrels” of oil equivalent, whereas “the Saudis claim 255 billion.”

Gasland, the Academy Award-nominated documentary film, portrayed the serious harms done by drilling for natural gas. Those unconventional supplies could play a significant role as a heavy transport fuel and in electricity generation. Still, environmentalists remain deeply suspicious.

“When we have made an effort to cooperate and advocated for the use of natural gas,” said Joanne Spalding, the Sierra Club’s Managing Attorney, “we have been called out, legitimately, by our members.” People who live with what they see as the byproducts of fracking oppose it. “We should be focusing on efficiency and renewables,” Spalding said her rank-and-file members often declaim. “In order for us to do this work,” she said, the Sierra Club needs the industry to acknowledge its problems and show a willingness to address them.

Although happy to extol the new reserves’ potential in electricity generation and transportation, an inclination to acknowledge shortcomings was not displayed by President and CEO of Milagro Exploration James Ivey, President and CEO of Clean Energy Andrew Littlefair, or Senior Vice President of Corporate Development for Chesapeake Energy Corp Tom Price, Spalding’s Global Conference panel colleagues.

Price several times referred to his company’s efforts to join with the Sierra Club in its heroic efforts to stop the coal industry. Ivey noted he would welcome clearly defined fracking regulations. But these were more pro forma than self-critical.

“I thought it was somewhat over the top,” Spalding said of Price’s refusal to acknowledge the problems shown in the film. “I think Gasland has huge value and raised some important issues,” Spalding said, adding, “There are a host of environmental issues that need to be addressed.”

The natural gas industry has resisted a federal regulatory standard and dealt with the issues on a state-by-state basis. The benefits are obvious. “There are some states where if the natural gas industry doesn’t want to be regulated, they’re not going to get regulated,” Spalding said,

Pennsylvania moved ahead on development without adequate regulation or infrastructure and created serious problems in the process. Colorado was different. “They were having a lot of problems and they put in a strong regulatory structure,” Spalding said. Gas developers like Chesapeake had seen how Colorado’s environmentalists had stopped coal and chose not to create obstacles. Though not perfect, “Colorado probably has the best regulation of any state,” Spalding said. “That gives you the space to then go and advocate for greater use of natural gas.”

To achieve regulation, “we are working with them,” Spalding said. But “it’s an uncomfortable alliance.” Some companies are better than others. Spalding noted Chesapeake Energy and Southwestern Energy had shown cooperation. But the industry as a whole has been recalcitrant "on this whole question of disclosing fracking fluids," she said. “And by the industry not being willing to disclose what’s in those fracking fluids, they have created the environmental activism that they so dislike.”

Sierra Club, Spalding said, is “willing to talk with anyone in the industry who wants to talk about improving environmental regulation.” And, she added, “we don’t expect to come to complete agreement.” What is necessary, she explained, is for the industry to be “willing to accept regulation to ensure that all natural gas production is done in a responsible way, because now it’s hit or miss.”

That is not achievable wherever the gas industry might want to drill. But “you can do a lot to reduce the environmental impacts,” Spalding said. Examples include New Mexico’s pit regulations and the orphan well rules in Texas. “It would be a lot easier if the industry would come along.”

Former Clinton CIA Director and pioneering electric car advocate R. James Woolsey spoke on the same panel as T. Boone and afterwards talked about the tension. “The complexity is the fracking water,” he said. “There are good ways to do it and there are technologies. But the companies haven’t done a decent job of educating the public or the environmentalists,” which threatens, he said, natural gas’s potential as “a great transitional fuel for moving toward renewables.”

Woolsey believes a resolution is possible. “They have to do something very much like what the timber companies and the environmentalists did in California,” he said. “They were absolutely at one another’s throats” until they met in a library “so they wouldn’t shout at each other.” They found common ground. “I think something like that could be done with hydrofracturing. But the companies have to put out what they’re doing, what the chemicals are, and the environmentalists need to be able to see it.”